Kiel Working Papers, Kiel Institute for World Economics
No 1521:
The agricultural and the democratic transitions. Causality and the Roundup model
Erich Gundlach and Martin Paldam
Abstract: Long-run development (in income) causes a large fall in
the share of agriculture commonly known as the agricultural transition. We
confirm that this conventional wisdom is strongly supported by the data.
Long-run development (in income) also causes a large increase in democracy
known as the democratic transition. Elsewhere we have shown that it is
almost as strong as the agricultural transition. Recently, a method has
been presented to weed out spuriousness. It makes the democratic transition
go away by turning income insignificant, when it is supplemented by a set
of formal controls. We show that the same method makes the agricultural
transition go away as well. Hence, it seems to be a method that kills far
too much, as suggested by the subtitle. This suggestion leads to a
discussion of the very meaning of long-run causality
Keywords: Long-run growth, transitions, causality and spuriousness; (follow links to similar papers)
JEL-Codes: O1,; P5,; Q1; (follow links to similar papers)
20 pages, May 2009
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